It’s interesting information and I’d love to see more of this. But it also makes me anxious about what of my data is being used for. (This is the eternal dilemma with the new tech world we live in…it gives us more interesting things, but it exploits us at the same time.)

In this case, it gave me a 6th way a CEO can demotivate their tech employees…so, this time, it’s worth the bargain.

With Uber in an uncertain time, Justin Bariso, an expert on emotional intelligence in business, explains, they need someone at the helm who is empathetic, self-aware, and can understand other’s perspectives. While these are sometimes seems as touchy-feely soft skills, they are essential in guiding a business going through a rough patch. Especially in the face of uncertainty, people are often guided more by emotions than by reason.

It shows disrespect to someone who helped build it. No one acts alone. No fortune can be self-made. Travis Kalanick, for all his faults, was a driving force at Uber. For the new CEO to publicly (if mildly) disparage him undermines everyone’s faith in Uber.

It promotes disunity. As Bariso explains:

It’s like if your dad says your family needs to improve their ability to work together, and then calls out your mom’s actions as “disappointing” and “highly unusual.”

Now, Khosrowshahi’s email was fairly mild in it’s tone – but Bariso still sees it as disruptive to an organization in crisis as it shows an alarming lack of emotional intelligence.

He framed his talk as a guide for founders and translation company owner-operators. But in an industry fraught with mergers and acquisitions, it had lessons for everyone.

Cowan’s Tenure in this ‘Curious Industry’

Cowan gave this talk from a position of unique insight. He founded Lionbridge in 1996 and led it as CEO through 20 acquisitions. In 1999, he brought the company public. And then he brought it back private again in a sale to the private equity firm H.I.G. in 2017. (I met Rory when he first arrived at SlatorCon, and with a smirk, he introduced me to a fellow from H.I.G. who happens to also be on the Board of Directors.)

Cowan described the translation industry as unique. He said it in a way that you might talk about a talented but frustrating teammate when you’re trying not to offend anyone. He played up this specialness of the owner-operators in the translation industry, declaring that most founders were “sensitive humanities majors” and “global misfits” who lack “street corner hustle.”

Cowan implied that his success at Lionbridge came because he didn’t have one of those “sensitive majors”, but a Harvard MBA. The path he charted for Lionbridge could serve as a primer for the evolution of the trends du jour in the business world…going public, synergy, outsourcing, crowdsourcing, on demand, the cloud, private equity. In contrast, TransPerfect’s success has often come from New York City hustle: the willingness to work harder, figure out how to do things for the first time, and the willingness to invest in people and long-term projects. I think it’s a stretch to attribute all of this to the comparative merits of an NYU versus Harvard MBA, but there’s a reason that most of Lionbridge’s growth has come from what he called “sporty” M&A deals with owner-operators.

Perhaps the most interesting wrinkle with which to analyze his talk….Much of the team that built up Lionbridge left as the sale approached, feeling frustrated and marginalized – several of them to become my colleagues. But…only a few short months after the sale to H.I.G. closed, Cowan stepped down as CEO after 21 years. I understand that many of his closest allies at the company have been let go by the new owner as well. He remains Chairman of the Board.

Should I Sell?

Cowan said the main question to determine whether you should sell or not was whether you woke up in the morning wanting to go to work. If you don’t, he said, then this was the time to sell – at what he believes is a market peak. He focused on companies that were having trouble scaling – a major problem among the many small to mid-sized companies in the industry. He attributed much of the problem to the founders themselves, as the skill sets that make a small company successful need to evolve in order for the company to keep going. For those struggling, Cowan suggested selling out as a means to cash in and get the help needed to scale.

Cowan emphasized that the process of selling was going to be painful. And it would need to be “endured.” The roller coaster process of Lionbridge’s sale was described in an excellent Slator piece by Florian Faes: as bidder after bidder dropped out, as H.I.G. was accused of “not adequately valuing the company” and “management attention was drained.” The deal did eventually close, but as Florian concluded:

It can be taken as an indication that ownership and top management at leading LSPs consider mega-mergers in the language services industry as difficult to pull off — and post-merger integration, risky.

Cowan gave 3 warnings to any company that might consider being sold. First, be upfront:

Be sure to “Clean up” or proactively disclose all ambiguities before starting process: Buyer WILL find them and they WILL taint value.

Second, there needs to be syzygy, a complementary pairing, between the purchasing company and the purchasee. “Values and culture are paramount,” he stressed.

Third, and the most important thing being purchased, according to Cowan, was “the next tier” of leadership. Buyers need to “risk adjust” the founder’s departure. He explained that this is why it was essential to involve the senior team of the company in the acquisition process. If you don’t, you risk disappointment, he warned.

After the Sale: Curing Founderitis

Given that the industry is filled with founders who own-operate their business, and given that Cowan has acquired 20 such business, and that he was recently acquired only to be pushed out himself…he clearly has a lot of opinions on this topic.

He suggested that buyers should do more than simply price in the founders’ departure: it was better them to leave as a way to cure the “founderitis” that he saw afflicting many companies. Only then were companies able to move “from maternal/paternal leadership to business metrics.”

Addressing the 80-odd members of the language industry, Cowan was brutally honest about the costs of selling out though. Here’s my best attempt to recreate his slide:

(Sort of kidding. Cowan didn’t use a meme – though as Renato and I agree, the translation industry needs more memes…)

Cowan makes very clear that founders need to get out in an acquisition – or if they stay, that they should become closer to team leads than the founders they used to be. As a founder who was pushed out of his position and much of his handpicked team fired after being sold, I wasn’t sure whether Cowan meant this as a warning or as a positive. Maybe just a description of reality.

He used a rather Harvard MBA term – “Synergy Targets” – as a soft way of saying something. He was more explicit about culture. I thought he even sounded bitter when he described how a sale destroys the culture you have built up.

The ideal seller in Cowan’s world is someone who wants to “exit” and sip Mai Tais on a beach. Because in the end, the point he tried to emphasize to any prospective seller…selling is about losing control.

I’ve managed over 50 technology employees over my career – and have been managed as a tech lead for quite some time. Here are some hard-won lessons from my experience.

1. Be bossy.

We’ve all seen Steve Jobs running around Apple having tantrums in movies. Especially as a young manager, he did this often – before he learned there were better ways to manage. There’s a small place in the world for that. Being bossy doesn’t always fail, but it is a recipe for disaster. When you look at the inspiring example of Sheryl Sandberg and the transformations she wrought at Facebook, you can see the benefits of true leadership. Leadership that is earned rather than cheap theatrics. Google has a culture that encourages cooperation and has created one of the most profitable companies in the world.

Ed Catmull is the founder of Pixar and the author of one of the best books on management, Creativity Inc. He explained what he saw as the core of good management:

I believe the best managers acknowledge and make room for what they do not know—not just because humility is a virtue but because until one adopts that mindset, the most striking breakthroughs cannot occur. I believe that managers must loosen the controls, not tighten them. They must accept risk; they must trust the people they work with and strive to clear the path for them; and always, they must pay attention to and engage with anything that creates fear. Moreover, successful leaders embrace the reality that their models may be wrong or incomplete. Only when we admit what we don’t know can we ever hope to learn it.

Many managers seek to emulate the raging teenager in Steve Jobs mode. They take as their naive mantra, “Be Bossy.” That’s the quickest way to lose all your best people.

2. Create a culture of blame.

I used to work for a company that had a top-down culture of blame. I hadn’t realized how bad it was until after (I was working in a different division). I heard horror stories from people who now lead this group. They spoke of how the head of their group would yell at their boss for every failure. And then how their former boss would break phones and throw stuff against the wall and loom over their desk. There was a rigid process to follow that was almost impossible given the rate of work. Anyone who tried something new was personally blamed. The turnover rate was catastrophic. It took a herculean effort to transform this culture into one where people felt able to fail and innovate.

The worst companies are those that are built on a culture of blame – because this leads to the creation of bureaucracy – quoting Rory Sutherland:

Bureaucrats really love a formula because it prevents them from having to exercise judgment for which they might be blamed…

You can avoid blame by claiming what you did was entirely rational, and as if the act was therefore unavoidable because reason told me to do this. We scoped the market, did market research. It told us that people needed that. So we produced that. If you follow all the precepts and fail, you won’t get fired or blamed because you were rational. If you do something which is better, but involves a degree of human imagination or judgement, if it works, well and better, you might get a bit of credit but you probably will get people saying it would have been even better if you had followed reason. If it goes wrong, you’re fired.

Innovation comes when you take risk. And bureaucracy is it’s death.

To quote Eric Schmidt: “To innovate, you must learn to fail well.” Failure is inevitable. And a business needs to acknowledge that. The businesses that are best with technology are built on this assumption. For the company in question, this led to a rapid adoption of various technologies and the development of many new ones.

3. Don’t value your employees.

One of the most dispiriting things I’ve ever experienced was a cartoon villain of an attorney threatening a room full of employees that we could be “upgraded” in a week. It’s hard to feel motivated and to push yourself and to make the small right decisions everyday when you feel devalued. And the truth of technology is that doing it right is hard. It involves long-term thinking. You need to design systems – and make decisions that allow you to scale. If you’re pushed to think short-term because you’re short-staffed or undermined or a pawn in political games, things will go okay for a while. Until they don’t. Those who sell and those who produce create value every day. But technology sets the foundation for them to create more value next year than they did today.

Never push loyal people to the point where they don’t give a damn

People aren’t interchangeable. They can’t just be upgraded like a faulty RAM drive. In the tech world where there is so much demand, that’s especially true. You especially need your tech team committed to making your company better and thinking long-term.

If you’re a decent person, a decent manager, an effective CEO, when asked the question of what made you successful…the answer is never “hard work” or “a great idea“. All of that helps. As does luck. (We all need to check our privilege.) But the one core common thing is a great team. This is a truism that Rory Cowan (former CEO of Lionbridge) stated at SlatorCon last week: “What someone buying your company is buying is ‘the next level’ of executives below the founder.” It’s probably one of his few areas of agreement with rival, Phil Shawe (co-CEO of TransPerfect). As Phil stated in his GlobalLink NEXT presentation as the key to the company’s growth:

– Find the best people.
– Align incentives.
– Get out of the way.

4. Be a Communist.

You can’t centralize everything. Anyone who promises to centralize all technology in a single group is promising to destroy innovation. Technology needs competing groups. It needs side projects. It needs, to quote Phil, controlled chaos.

What a tech company does need is to agree to the “rules of the road.” They need to agree on rules for competition and cooperation. But if you put one dictator above everyone, you will fail.

5. Being clueless about technology.

You don’t need to be an expert in technology to lead a tech company. After all, it was Steve Jobs, not Steve Wozniak, who ran Apple. But you do need to engage with the concepts and care about it. You need to have a base level understanding of what’s going on at minimum. And from there, you can often manage people rather then technology. The best tech CEOs need to be able to assert in clear principles their vision.

What you don’t want is to not know how to operate the most basic consumer technology. I once worked with an executive to whom I handed a set of Apple earpods. This was back in the day when Apple earpods still had wires and when there was still a headphone jack on the phone. (*Those were the days!*)

I handed the package over to the executive, and they looked at me quizzically. I assumed they just wanted me to open the package, so I did that, and handed the opened case over. They were still confused. So, I unwound the headphones and held them out. They asked me to explain how it worked – and I really wasn’t sure what to say. “These pieces go in the ears,” I said. “And you can talk normally, but the microphone is here.”

Now, there’s nothing wrong with that. My frustration came when the same executive told me that they didn’t understand what tech people did all day. And then assumed that they must be lazy and drains on company profitability. Many companies have thought that over the years, but few of those companies continue to exist today. I was just lucky enough that another executive came along to guide my career from there.

Conclusion

It’s easy to say you’re a tech executive. It’s harder to be one. In the end, most of the things to avoid are the same things that you should avoid if you want to be a good person.